In real estate, the term 'Approach' often refers to the different methods or strategies used in appraising property value. Each approach considers various factors impacting the valuation of real estate.
In finance and real estate, capitalization is the process of deriving a present value for future income through a capitalization rate. In accounting, it involves setting up an asset on financial records to be depreciated over its useful life rather than expensed immediately.
A Comparative Market Analysis (CMA) is a crucial process in real estate that involves evaluating similar, recently sold properties ('comparables') to derive an estimated market value for a subject property. This aids in setting a realistic price for selling or buying real estate.
The Comparative Unit Method is an appraisal technique used to determine the value of a property by comparing it against standardized units.
A drive-by appraisal, also known as an exterior-only appraisal, is a valuation of a property's market value based primarily on an external inspection from the street or perimeter without conducting an interior evaluation of the property.
Evaluation in real estate involves a detailed study of the potential uses of a property, but it does not focus on determining the present value. It includes analyses such as market trends, feasibility studies, highest and best use assessments, and base land use.
